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Issued at a Discount and Redeemed at Par

Discount on i...

Question

Discount on issue of debentures is debited at the time of issue & then is charged to the ___

A

None of these

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B

Either Statement of profit & loss or Securities premium

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C

Securities premium

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D

Statement of profit & loss

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Solution

The correct option is B
Either Statement of profit & loss or Securities premium

Discount on issue of debentures is debited at the time of issue & then is charged to the either Statement of profit & loss or Securities premium.

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Q. Grand Hotels Ltd.issued 30,000, 7% Debentures of ₹ 100 each at a discount of 5% redeemable at a premium of 5% . It decided to write off loss on issue of debentures first from Capital Reserve then from Securities Premium Reserve and balance from Statement of Profit and Loss. It has balances as follows:
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When debentures are issued at premium & redeemed at premium, the loss on issue of debentures account is debited with ___

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Pass the journal entry.

When debentures are issued at premium & redeemed at premium, the securities premium account is credited with ___

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